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XRP's hidden threat
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Current market structure responsible for Ethereum’s underperformance
Key points:
Coinbase analyst linked ETH’s underperformance to broader market factors.
Besides, ETH's dismal results were linked to crypto investors flooding on other altcoins that might be difficult to exit.
News - According to a Coinbase analyst, David Duong, Global Head of Research, ETH’s recent relative underperformance to peers like BTC and SOL was also partly driven by the current market structure.
Duong said most mutual funds and other US financial institutions trimmed risk in September (the end of their fiscal year). Additionally, investors are cautious of US elections, while crypto natives are locked elsewhere.
Crypto investors locked elsewhere - Given US investors’ risk-off mode, current demand was driven by crypto natives. Unfortunately, per Duong, crypto investors were crowded into other altcoin positions that were harder to exit. This made unlocking capital flow to ETH and the rest of the ecosystem harder.
“Crypto natives are driving the market at the moment, and this cohort may be crowded into altcoins and other crypto positions that are getting more difficult to exit.”
Duong noted that this fragmented liquidity was another key factor behind ETH’s underperformance. Besides, the altcoin has recorded declining network activity and hiked inflationary status, compounding the dismal results.
Tether’s USDT is a property, rules UK court - Why its a milestone for crypto
Key points:
A UK High Court ruled that Tether [USDT] is considered property under British laws.
It marks the first time cryptocurrency's legal status had been determined after a lengthy trial in the UK.
News - A UK court has made headlines for declaring Tether’s stablecoin USDT property under British laws. It marks the first regulatory clarity and legal status of cryptocurrency in the country, days after unveiling a new crypto bill to consider digital assets as properties.
What happened—The legal clarity of Tether [USDT] was one of the key issues highlighted in a case brought by a crypto fraud victim. Part of the victim’s lost crypto included USDT, which was reportedly transferred to various crypto mixers.
During his 12 September decision on the matter, Deputy Judge Richard Farnhill stated that "USDT attracts property rights under English law.”
He further referred to USDT as a “rather a distinct form of property not premised on an underlying legal right… subject of tracing and can constitute trust property in the same way as other property.”
The judge referenced a 2019 decision by the same court, which supported classifying cryptocurrencies as properties. The same stance was echoed in a recommendation on digital assets as property in the 2023 report by the Law Commission.
Interestingly, the 2023 recommendation was adapted to a bill on 11th September. The bill, Property (Digital Assets, etc.), aims to provide some legal protections for users, especially during fraud or scams. If adopted as law, it could put the UK amongst the top regions with regulatory clarity in the fast-moving space.
XRP prints bullish signals, but there’s one caveat investors should know
Key points:
XRP chalked a bullish triangle pattern and printed hidden bullish divergence, suggesting an upside potential.
However, whales have been dumping their XRP holdings, which could delay bullish prospects in the short term.
News - Whale actions could undermine XRP's bullish expectations in the short term. The altcoin has printed a hidden bullish divergence and chalked a symmetrical triangle pattern that could trigger a 500% in the long run.
XRP’s whale actions - Apart from bullish chart formation, the altcoin has seen renewed interest in the derivatives market. This has hiked open interest rates (OI) as bets on the altcoin price appreciation increased from speculators on the futures market.
However, XRP has struggled to clear the $0.6 hurdle. This was a supply zone in Q3 and a bearish order block (OB) on daily charts, formed in April. Whales have been cashing out in droves at the level, further derailing break-out prospects.
In the past few days, $24 million worth of XRP has been dumped on Bistamp and Bitso. This indicated heightened profit-taking from whales and could delay the bullish breakout from the triangle pattern in the short term.
As a result, key support levels to consider if whale sell-offs continue were $0.54, $0.50, and $0.45.
Coinbase CLO criticizes SEC after $1.5 mln settlement with eToro
Key points:
eToro has paid $1.5 million for settlement with SEC and will only support BTC, ETH, and Bitcoin Cash.
Coinbase CLO criticized the SEC’s move and called it 'no respect for the law’ and ‘no logic.’
News - eToro has paid $1.5 million as part of its settlement with the SEC. The platform was charged for operating an unregistered broker and clearing linked to its crypto trading platform. The firm will discontinue other tokens and only allow BTC, ETH, and Bitcoin Cash.
Expert reactions - However, some top legal minds in the sector have criticized the SEC's move. According to Coinbase’s chief legal officer, Paul Grewal, the decision to only allow BTC and ETH and disregard others as securities without proper legal grounds suggested ‘no respect for the law.’
He stated, “They just conceded ETH is not offered as an investment contract security in secondary markets. But SEC will not explain why ETH and BTC but no others--because they can't. There is no plan…. no logic, no due process, and certainly no respect for the law.”
What’s more? For her part, Kristin Smith, CEO of the Blockchain Association, noted that the enforcement action trend will continue until the end of September. Market observers stated that the actions tend to increase as the agencies’ fiscal year ends on 30 September.
Smith added that the move was at least positive because it confirmed BTC and ETH’s status as non-securities. But a lack of regulatory clarity persisted for other assets.
More stories from the crypto ecosystem
Crypto Scams Uncovered
In September, Indodax, an Indonesian crypto exchange, lost $22 million in crypto assets involving BTC, ETH, POL, and SHIB. The hack targeted the exchange’s hot wallets and exploited the firm’s withdrawal system.
In mid-2023, hack acquired $35 million worth of crypto assets from Atomic Wallet, a popular non-custodial wallet. The hack targeted several assets, including BTC, ETH, USDT, XRP, and ADA. The stolen funds were changed to ETH and transferred to decentralized exchanges (DEXs), then mixed through Tornado Cash. North Korea-based entities like Lazarus Group commonly use this strategy.
Pig butchering became the largest revenue-generating scam in 2024. According to the Chainalysis report, it topped the list as the prominent crypto illicit activity. This method involves gaining users' trust before swindling them. So far, a Myanmar scam netted $101.2 million from this scheme this year.
Top 3 coins of the day
Artificial Superintelligence Alliance (FET)
Key points:
FET broke above a long-term trendline and could push for more gains.
A 55% gain could be at stake if FET recovery extends to $2.
What you should know - Early in the week, FET broke above a key long-term trendline resistance that has repelled price thrice since March. This move could tip further gains, especially if FET defends the level as support. The AI token traded at $1.32 at press time and could aim at the immediate bullish targets of $1.59 or $2.0. A likely move to the latter would trigger a 55% potential gain. The RSI reading was bullish and hasn’t printed overbought conditions yet. As such, extra recovery was feasible.
Popcat (POPCAT)
Key points:
POPCAT has seen +30% recovery gains this week.
Rising demand suggested a likely recovery extension.
What you should know - POPCAT was one of the top weekly gainers on CoinMarketCap. The memecoin was up +30% amid a remarkable recovery this week. It was on the verge of defending the 50% Fib level ($0.62) as support. If so, POPCAT could be well primed for extra 20% gains if it retests its September highs near $0.77. The rising demand as noted by the bullish RSI reading, confirmed the above scenario was possible. However, the outlook could be invalidated if the buying interest waned.
Dogs (DOGS)
Key points:
Coinbase International Exchange announced a futures listing for DOGS on 19th September.
DOGS has been the top trending coin on CoinMarketCap this week.
What you should know - DOGS saw an explosive upswing post-Binance listing. However, afterwards, it has been consolidating within a tight range in September. On Thursday, Coinabase International Exchange announced a futures listing for the memecoin, scheduled for 19 September. This has triggered new interest as the token topped CoinMarketCap trending coin again. However, there was no much movement on price charts, as the RSI flashed bearish signals after slipping below the 50 mark. Whether the Coinbase listing will trigger a massive move next week remains to be seen.
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